Economic Problems.
Expenditures Approach to Calculating GDP (weight 45% of the assignment grade)
BEA estimates the nation’s GDP for each year and each quarter. But new GDP statistics are released every month. Why? Because for each quarter, BEA estimates GDP three times. The advance estimate, coming about a month after the quarter’s end, is an early look based on the best information available at that time. The second estimate and third estimate each incorporate additional source data that weren’t available the month before, improving accuracy.( www.bea.gov).
BEA publishes estimates of levels at annual rates (for most series) for ease of comparisons with related and historical data. For example, in its February 2, 2004 personal income and outlays release, BEA estimated that personal income for December 2003 was $9,335.8 billion at an annual rate. This is easily compared to BEA’s estimates of personal income for the fourth quarter of 2003 ($9,312.6 billion, at an annual rate) and for the entire year of 2003 ($9,187.4 billion).
Why was the nominal GDP greater than the real GDP? By how much?
GDP is composed of a number of categories. What category makes up the largest portion of GDP? What category makes up the smallest portion of GDP?
What is “Gross private domestic investment”? What does gross private domestic investment measure?
What is “Net exports of goods and services”? Why it is negative?
How much was the National defense for the last quarter? Calculate percentage of National defense out of “Government consumption expenditures and gross investment”. Calculate percentage of National defense out of GDP.